Myths have been perpetuated by man since the dark ages. They are mysterious and can evolve into ‘beliefs’ to such an extent that they are thought to be ‘true’. Examples of nouns analogous with the word ‘Myth’ are ‘legend, fable, parable, fairy story, folk tale, urban myth, illusion, delusion, falsehood, fabrication’ etc. A myth can also be a popular belief that has become associated with a person, institution, or profession. In our profession/industry several myths are alive and well.
Some of the most popular ones come from clients of ours who have been told by their banks, quote: “Mortgage brokers should only be used ‘as a last resort’; Mortgage brokers always charge fees; Mortgage brokers hurt your credit rating when they pull several credit reports; Mortgage brokers use lenders who aren’t reputable or stable and who may collapse” etc. Earlier this year, a bank mortgage specialist tried to perpetuate the misconception very publicly ‘in print’ that mortgage brokers are unreliable, here today gone tomorrow entities who charge ‘set up fees’ and have ‘hidden costs’.
It is true that over 30 years ago mortgage brokers main source of money was from private lenders. Our industry was in its infancy and had not developed the channel of institutional lenders that we have today. Our industry was not organized, regulated or sophisticated then, and yes fees were charged for services rendered as it was the only way to be compensated. Today we have over 40 institutional lenders including banks, (all highly regulated and reputable) who pay us a ‘finder’s fee’ for sourcing and sending them new business. In the vast majority of deals we do not charge any fee, we only charge fees for deals for more difficult transactions, and we cannot charge a ‘set up’ fee. Also because we are highly regulated we must provide full disclosure, something which the banks are not required to do.
We only pull one credit report for each client/transaction which is accepted by all our lenders. We also discuss credit reports and issues in detail with our clients, something that the banks also do not do. Most importantly, we are independent professionals who provide you with unbiased advice, in your best interests, not the other way around.
These are just some of the reasons that our services and market share have grown so dramatically, especially in the last decade, and that our industry will continue to grow and ‘Win’ business from the big banks as Canadians become more aware of the benefits and value of our services.